Fitch lifts Bank of Cyprus bonds

Fitch Ratings said it upgraded Bank of Cyprus PCL’s €1 billion outstanding residential mortgage covered bonds to B- from CCC.

The outlook is stable.

The upgrade on the bonds follows the upgrade of the bank’s long-term issuer default rating to CCC from CC, Fitch said.

Fitch also said it assigned a stable outlook to the B- rating of the covered bonds to take into account the slowdown in the underlying loan-quality deterioration even if pressures continue in 2015 as the economy contracts further.

The bank’s use of resolution methods other than liquidation contributes to the upgrade of the ratings, the agency said.

The upgrades also consider the bank’s large size in its domestic market and its interconnectedness with the Cypriot economy, Fitch added.

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